Denver Water is proposing raising rates between 7 and 10 percent next year for residential customers to generate an extra $12 million in revenue to fill a budget shortfall.
The water utility’s board of commissioners was presented three staff rate proposals Wednesday that would boost rates for customers – depending on how much water they use and where they live.
The extra cash will cover a drop in revenues caused by dwindling water sales. Denver Water customers are using about 20 percent less water than they did before 2002.
The utility plans on raising rates an average of 8 percent a year through 2009.
“We’ve delayed millions of dollars in projects, left positions unfilled, rearranged our debt profile and tapped into our cash reserves,” said Trina McGuire-Collier, a utility spokeswoman.
The board, which is scheduled to vote on the rate hike Sept. 14, is considering changes to consumption and meter charges.
About 85 percent of Denver Water’s customers pay a two- month meter charge of $8.51. Under the proposed increase, that would rise to $9.15, which is a 7.5 percent increase.
To calculate the consumption charge, the utility divides users into city and suburban customers and then charges them based on water use.
To calculate that charge, the utility splits customers into three “blocks” that assign rates based on how much water they use: 0 to 22,000 gallons; 23,000 to 60,000 gallons; and more than 60,000 gallons.
The staff’s preference is to add a fourth block for high-end users and adjust rates so high-volume consumers pay more.
For example, under the existing structure, a person who lives in the city and uses 18,000 gallons of water every two months pays $1.71 per thousand gallons – or $30.78 in consumption charges on their bill.
Under the proposal, that same customer would be charged $1.81 per thousand gallons for the first 16,000 gallons and $2.17 for each of the next two thousand gallons. The bill would be $33.30.
A city household that uses more than 80,000 gallons in a two-month period would pay a rate of $3.53 per thousand gallons, almost double the lower-use home.
Bart Miller, water program manager for Western Resource Advocates, said this plan sends the right price signal to customers who waste water.
“The bottom line,” Miller said, “it puts less of a financial burden on customers who use less water.”
Commissioners also discussed adding a fifth block for people who use more than 100,000 gallons of water every two months.
“I’m not trying to penalize them, but the person who irrigates a large lot has to realize that they have choices,” said Commissioner Thomas Gougeon.
Denver Water will hold public meetings next week on the proposed rate changes. On Tuesday, the meeting will be at Park Hill United Methodist Church, 5209 Montview Blvd., Denver, from 6:30 to 8:30 p.m.
The second meeting will be from 6:30 to 8:30 p.m. Wednesday at Grace Presbyterian Church, 251 E. Sterne Blvd., Centennial
Staff writer Kim McGuire can be reached at 303-820-1240 or kmcguire@denverpost.com.
